BRIDGEPORT, Conn.  For the third time in the past two years, prosecutors on Tuesday accused former Cendant (CAR) chairman Walter Forbes of masterminding an accounting fraud that inflated his company's earnings by $252 million. The disclosure of the fraud in April 1998 caused Cendant's share price to plummet 50%, wiping out $14 billion in shareholder value in one day, making it one of the biggest accounting frauds of the 1990s.

In a scene reminiscent of the movie Groundhog Day, the government argued that Forbes, 63, founder of Comp-U-Card International, used CUC's merger-and-acquisition reserves as a slush fund through which his underlings padded the company's earnings.

The government has already put Forbes on trial twice for his alleged actions. In a trial that began two years ago, a jury convicted Forbes' right-hand man, E. Kirk Shelton, of securities fraud, but it deadlocked on the question of Forbes' involvement. Shelton received a 10-year prison sentence. In a retrial of Forbes last year, a different jury also reached an impasse.

In the 1990s, CUC was profitable, prosecutors conceded, but Forbes wanted the company to grow by 25% per year, so he had his subordinates "cook the books," according to assistant U.S. Attorney Michael Martinez.

Forbes allegedly pulled off the fraud, Martinez said in Tuesday's opening arguments, by merging CUC with other companies and creating huge accounting reserves. But the problem with the scheme, Martinez continued, was that CUC had to fill a larger and larger hole each year in order to keep up with the 25% growth rate.

Finally, in 1997, Forbes agreed to merge CUC with a franchise company, HFS, to form the travel and real estate firm Cendant. Under terms of the merger, top HFS executives would run the company the first two years and then Forbes and his executives would assume control. Martinez argued that Forbes tried to hide CUC's accounting games from Cendant CEO Henry Silverman, but that the new management eventually uncovered the fraud.

In response to the government's accusations, Forbes' lead attorney, Brendan Sullivan, said Forbes knew nothing about the fraud. He laid the blame for the accounting mess squarely at the feet of the government's chief witness, former CFO Cosmo Corigliano.

Forbes' first two trials took place in Hartford, before U.S. District Judge Alvin Thompson. The current trial is being heard in Bridgeport before U.S. District Judge Alan Nevas. Unlike Thompson, who gave defense attorneys wide latitude to argue motions, Nevas sternly lectured one of Forbes' lawyers, Barry Simon, for raising questions about witnesses Tuesday afternoon, saying he wanted to deal with specific requests regarding the testimony of government witnesses all at once, not each day on the jury's time.